Janus Adams: Finances tell a tale of disparity

Published 5:36 pm, Monday, August 20, 2012

In Lorraine Hansberry's classic play, "A Raisin in the Sun," Lena Younger inherits $10,000 in insurance benefits upon the death of her husband. The first thing she does is to make a $3,500 down payment on a house for her family. But, there's a catch: it's the segregated 1950s and the house is in a white neighborhood.

Why would Mrs. Younger make such a decision despite the dangers her family would face on account of racism? Because, says she, it's the only house she can afford; housing costs being relatively lower in white neighborhoods.

Significantly, there's a part of the home-buying drama Hansberry's play leaves out: Once Mrs. Younger put down her deposit it was, in fact, unlikely that she would have gotten a mortgage.

Mrs. Younger would have been denied her mortgage not just on account of race, but gender. In those unregulated days, a woman -- were she allowed to buy her own home at all -- would have been required to have a male co-signer.

That was then. What about now? How are Lena Younger's granddaughters faring? Two studies tell the tale.

Taken in context, white men in prime working years (ages 36 to 49) have a median wealth of $70,000; the median for single white women is $42,600.

Alarmingly, this median number means that for half of African-American women, their net worth (assets less liabilities) isn't even $5 -- and this study, released in 2010, was based on statistics researched before the economic downturn.

Today's numbers are worse. Indeed, for those black women who took grandmother's lead into home ownership, their net worth may be less than zero. The black middle class has been particularly hard hit by the economy. With total communities under water, simply put: they're drowning.

Of course, long-term disparities factor into these numbers -- so, too, contemporary ills. Case in point: Wells Fargo Bank. This July, on charges of predatory lending, the bank settled a Justice Department suit against it for $175 million.

Denying any wrongdoing, the bank cited as its reasons for settling a desire to avoid protracted litigation and a "commitment" to help "turn the housing market around."

Filing suit on behalf of 4,500 Black and Latino Wells Fargo mortgagees in the Baltimore-Washington area -- and working in the interests of more than 34,000 black and Hispanic customers across 36 states affected in a five-year period -- the Justice Department charged the bank with deliberately steering borrowers of color into high-cost loans with excessive fees.

Mrs. Younger could relate. But, what of her granddaughters whose net worth, fortunately, well exceeds the median? How are they faring?

In its study, "Financial Experience and Behaviors among Women," Prudential Financial found that, of the 1,400 women studied, 53 percent -- whether single or married -- were primary breadwinners. That's a major change for American families and the country.

In generations past, women had little knowledge of how money works. Says Lisa Wise of Wise and Associates, "There was no emphasis on financial literacy in school; or how to balance a checkbook. I did learn how to bake a cake, which I haven't done in a really long time. But, every day I have to make financial decisions."

Says personal finance expert Manisha Thakor, "The default speak of the financial services industry is `male' and that may be the reason women don't feel more comfortable with their finances. All the sports and war analogies (beating the market, crushing the competition) can leave women feeling like they are on another planet often when it comes to personal finance."

Because Mrs. Younger -- born to slaves and sharecroppers; come-of-age during the Great Depression -- knew hard times, she'd still find cause for optimism today. And that, say some, regardless of race or gender, may prove the greatest disparity of all.

Columnist Janus Adams is an author, historian, and social commentator. Her e-mail address is letters@JanusAdams.com.